TI work letter (build-out) calculator.

When you ask for build-out above the landlord’s allowance, they don’t give it away — they amortize it back into your rent. See exactly how much a tenant-improvement package adds to your rate per square foot over the term.

TI amount to amortize

$/SF

Space size

Lease term

yrs

Landlord amortization rate

Added rent to amortize TI

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Total TI amortized

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Added annual rent

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Added monthly rent

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Landlords amortize over-standard TI into rent like a loan — principal (the build-out cost above the allowance) plus interest, spread across the lease term. The rate is negotiable; a shorter term or higher rate means a bigger rent bump. This is the added rent on top of your base — negotiate the allowance up and this shrinks.

How build-out ends up in your rent

When a tenant needs build-out beyond the landlord’s improvement allowance, the landlord rarely just pays for it — they amortize the extra back into your rent, principal plus interest, over the lease term, exactly like a loan. This calculator shows how much a tenant-improvement package adds to your rate per square foot, which is why negotiating the allowance up directly lowers your rent.

Example. Amortizing $40 per square foot of over-standard build-out across a five-year term at 8% adds about $10 per square foot per year to your rent. On 3,000 square feet, that is roughly $30,000 a year, or $2,500 a month, on top of base rent — a strong reason to push the landlord’s allowance higher before signing.

Frequently asked questions

What is a work letter and TI allowance?

A work letter is the section of a lease that spells out the build-out — who does the work and how much the landlord contributes. The tenant improvement (TI) allowance is the dollar amount (often quoted per square foot) the landlord funds toward finishing the space.

How is TI amortized into rent?

When a tenant needs more build-out than the allowance covers, the landlord typically fronts the extra and amortizes it back into the rent — principal plus interest over the lease term, just like a loan payment. Over-standard TI therefore raises your effective rent.

Who pays for tenant improvements?

It’s negotiated. The landlord’s allowance covers a set amount; anything above that is either paid by the tenant up front or amortized into higher rent. A tenant rep’s job is to push the allowance up so more of the build-out is landlord-funded and off your rent.

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Estimates are for planning only and use simplified assumptions — not tax, legal, or investment advice. Verify with your lender, CPA, and a full broker analysis before acting.